Last Friday, Florida Governor Rick Scott signed HB 95. This bill amends § 726.109 of the Florida Statutes by adding this broad defense to a claim to avoid a charitable contribution as a fraudulent transfer:
- The defense only applies to a constructive fraudulent transfer claim.
- A contribution by a natural person within 2 years before a bankruptcy or the filing of a lawsuit to recover the contribution is still a fraudulent transfer unless either:
- The transfer was consistent with the practices of the debtor in making the charitable contribution; or
- The transfer was received in good faith and the amount of the charitable contribution did not exceed 15 percent of the gross annual income of the debtor for the year in which the transfer of the charitable contribution was made.
- The law applies only to transfers made after July 1, 2013.
It will be interesting to see if other states follow the leads of Minnesota and Florida in protecting charities from fraudulent transfer claims.
Florida HB 95 is here.